Graduate Students

DeVry Buys a Higher-Education Company in Brazil

March 11, 2009

Nearly two years after hiring a director of international-business development, DeVry Inc. announced this week its first major new development in its international business. The company said it was buying a majority stake in a Brazilian higher-education company whose colleges enroll about 10,000 students.

DeVry said in a news release that it would pay $23.5-million in cash, and would assume the debt of the company, called Fanor, in return for an initial stake of nearly 70 percent.

Fanor owns three institutions and — like DeVry University, the flagship institution of its acquirer — offers programs in business and management. The Fanor institutions also have programs in law and engineering.

One stock analyst, Trace A. Urdan of Signal Hill, questioned the purchase, saying that it appeared that DeVry was paying too much and that the deal would be a “vanity-driven distraction” from more important matters, such as further integrating the programs from the company’s July 2008 purchase of the health-care-focused US Education Corporation, and improving programs at its medical school on the Caribbean island of Dominica.

Brazil, where U.S.-based Laureate Education also owns colleges, is considered a thriving market for for-profit colleges because of its growing middle class, although the Brazilian economy too is slowing because of the world economic crisis. —Goldie Blumenstyk